The CFPB put debt collection companies on notice on Wednesday through bulletins saying that all companies under the agency’s supervision would be held accountable for any unscrupulous business practices used in collecting a consumer’s debt.
“These bulletins make clear that it doesn’t matter who is collecting the debt — unfair, deceptive, or abusive practices are illegal,” CFPB Director Richard Cordray said. “Consumers need options to help them secure fair and respectful treatment from those debt collectors that fail to abide by the law. They can protect themselves by using our action letters to communicate with debt collectors and by submitting a complaint to us if they believe they are harmed by illegal conduct.”
Additionally, the CFPB announced that it is now accepting debt collection complaints and is in the process of publishing action letters for consumers to review in corresponding with debt collection agencies.
It is estimated that there are more than 4,500 debt collection agencies across the U.S. A report released earlier this year by the Federal Reserve Bank of New York showed that nearly 15 percent of credit reports show debt collection items.
The CFPB made note of the following practices as illegal in its first bulletin: falsely representing the debt or amount of the debt, misrepresenting that a debt would be forgiven or waived, failing to post payments or credit a consumer’s account with payments and threatening action the debt collector does not have the authority to pursue.